Feb. 24 (NBD) -- Chinese conglomerate Fosun International Limited (hereafter referred to as "Fosun International") on Thursday announced the purchase of a stake in Jeanne Lanvin SAS (hereafter referred to as "Lanvin"), long-established French couture label which has been facing financial predicament. 

The deal will make Fosun International the majority shareholder of the historic French fashion house, and current shareholders will retain a minority stake in the latter. 

Fosun International to invest 100 million euros in Lanvin 

Fosun International didn't disclose any financial details of the transaction. 

According to Reuters, the Chinese conglomerate saw off competition from Qatari investment fund Mayhoola, the owner of lxuruy brands Valentino and Balmain, to take control of Lanvin, and will invest around 100 million euros (124 million U.S. dollars) in the French fashion brand.

Founded in 1889, Lanvin has operations in more than 50 countries and regions. Plagued by designer departure and internal conflicts over the past few years, the fashion brand saw its sales volume plunge by 23 percent to 162 million euros (200.9 million U.S. dollars) in 2016, and reported its first loss in more than a decade, with the net loss reaching 18.3 million euros (22.7 million U.S. dollars) in the year. It was projected the label's net loss would widen to 27 million euros (33.5 million U.S. dollars) in 2017. 

Joann Cheng, deputy CFO of Fosun International and executive president of Fosun Fashion Group, said the deal with Lanvin will infuse Fosun Fashion Group with trendsetting fashion. As China is becoming a major growth driver of the global luxury market, Fosun International is confident to rejuvenate Lanvin with its global resources and expertise while dedicating itself to maintaining the fashion label's exceptional product quality and historical value.

Feng Lin, founder and CEO of M&A platform DealGlobe, told NBD Friday that amid the increasingly fierce competition among luxury brands, the living space for independent marques like Lanvin is becoming smaller and smaller. To Fosun International, the biggest challenge is whether it can take advantage of opportunities arisen from consumption upgrading to grow Lanvin's business in China.

Chinese firms rush into global fashion industry

Fosun International has been wild about acquisitions in areas like global fashion and consumer goods in recent years. 

As early as 2011, the company purchased a 9.5 percent stake in Greek jewelry and apparel retailer Folli Follie Group, and increase its stake to 13.9 percent in 2014. Also, it had stakes in Italian high-end menswear label Caruso, German apparel brand Tom Tailor, upscale American fashion brand St. John Knits, and French fashion label IRO. 

In fact, Fosun International is not the only Chinese company that is looking out for overseas luxury brands. 

Shandong Ruyi Group, one of China's largest textile firms, has also been expanding its footprint in the fashion area.

The company has bought a stake in French group SMCP (the owner of Sandro, Maje and Claudie Pierlot labels), British-based luxury clothing manufacturer Aquascutu, and RENOWN which used to be Japan's leading apparel company. 

In November last year, it became the controlling shareholder of Hong Kong-listed high-end menswear brand Trinity Limited. This month, it took control of Swiss leather-goods house Bally.

Shenzhen Ellassay Fashion Co., Ltd. is also an active player in overseas hunt for fashion labels. 

The company had purchased shares of German womenswear brand Laurèl, American premium apparel and accessories brand Ed Hardy, and French designer brand IRO. 

Last year, it was licensed to run Chinese-American designer Vivienne Tam's eponymous line in mainland China. 

Against the background of consumption upgrading in China, Chinese companies are showing stronger interest in European and American luxury fashion labels. 

Global management consulting firm McKinsey & Company said that the consumer confidence index in China reached a new height for nearly a decade in 2017, which will be translated into higher consumption expenditure. It is predicted that Chinese consumers' spending on fashion goods will grow by six to seven percent over the next five years.  

Email: lansuying@nbd.com.cn